The FINANCIAL — I have been studying entrepreneurship as a substantive area of concentration for some seven years now.
The interest in entrepreneurship initially came from my travels mainly in the South Pacific region where, across hundreds of islands, people struggled to make a living with hardly any resources other than their tribal land and the wide open sea. As development strategists assigned to bring a degree of economic activity, we needed to constantly innovate ways and means of providing the governments and their people things to do to make a living. It was not that simple or easy.
We did however succeed in developing village tourism, offering the bounty of nature as the main product. Simple cottages were built of native wood and leaves, bath tubs were carved out of large rocks, locally woven mats were used as carpets, fish and fruits and yams from the villages were gently cooked and offered as designer breakfasts, meat was cooked on stones to make them look more exotic, strings were tied across hollow drums to sound like a huge guitar with only the base notes, sea shells and dried fruits were tied on the ankles of villages girls who hopped and danced to an eerie music and songs of big and sturdy men wearing crowns of frangipani and mango leaves.
Suddenly it all clicked and the humble cottages on the sea and on the mountains became an instant tourist attraction. With the tourists, came a number of wonderful products in the market: necklaces and bracelets from coloured seas shells, sculpture of stones and wood, carvings on coconut shells, skirts of coloured grass, tables and pots of solid mahogany, kava bars where a strange and un-drinkable juice from a native root was served as a non-alcoholic intoxicant which sent visitors to a dream land at night.
South Pacific islanders were often dismissed as somewhat laid back, lazy and simple people who were happy sitting around in the villages and talking of demons and legends. Their simplicity was regarded as a major hindrance to development. But, when they saw some clear ways of making a living, they all showed a capacity for work, for innovation and for substantially adding value to their lives.
In the United Kingdom, as Director of Entrepreneurship Development Centre London, I would ask my students how they would define innovation and how innovation added value. I would tell them that some 70 per cent of patents filed in the United States came from India and China, that innovation was often the art of thinking laterally to add value to an existing product, service or business process; that the tooth brushes on the supermarket shelves, the ingenious razors for shaving and HSBC’s Premier Client scheme to provide world class service to top clients have all been instant success stories; that I-Phone is a global miracle for comprehensive connectivity. The Indians used aromatic essences for thousands of years but some 20 years ago, some enterprising businessmen decided to capture those essences in a variety of soaps and took a large size of the global soap market. The hand-held tractor, originally designed by an ingenious engineer in Sri Lanka and sold to a Japanese firm, is now produced in thousands and sold throughout the world.
Entrepreneurship is not about just doing any business. It is about innovating and adding value to existing products, services and processes which have specific need in a market. It is also about dreaming of future needs and demands and creating products and services which have a competitive edge. What is most interesting is that most innovations look simple and they provide a loaded value to customers. From fashion to tourism, from travel to transport, from food to wines and vodka, from wedding parties to honeymoon chalets, from education to training and indeed in the whole gamut of our lives, we encounter innovation and entrepreneurship which add greater comfort, greater safety and greater value.
Growth today is charted by the capacity to innovate and the level of entrepreneurship. A large number of institutions and other centres have now mushroomed around the world which teach innovation and entrepreneurship. The quality of business footprint in developed and emerging markets are graded not by the volume of production and trade, but by a nation’s capacity to strategically think, plan and innovate, and continue to innovate.
Despite the overwhelming evidence that surrounds us that innovation, value addition and entrepreneurship are indeed keys to moving economies to the frontiers of success, I see no real effort on the part of most emerging markets to clearly understand and support research and development, subsidise innovation and entrepreneurship. Often, governments, donors and a multitude of agencies are engaged in policy studies .Billions of dollars are doled out for voluminous research and policy documents which may simply sit on the shelves, unread and un-implemented. Traditional approaches, formatted by academics and related policy institutions, have been to rely on policies as the essential tools for charting development. While policy studies and policy formulations are critical, the inability to trigger the dynamics of development momentum and growth in any emerging market is mainly on account of the lack of understanding that it is only a clever country which can maximise the advantages it has by way of resources and people.
In 2008, I was on a UNDP mission in Bangladesh to review and revamp the National Industrial Policy. During my time in Dakha, Chitagong and other cities, I met with some 160 critical stakeholders in government, industry and various associations and institutes. The typical industrial policies, such as the Afghanistan National Development Strategy I reviewed in Kabul, have all been a set of highly enthusiastic promulgations of goals and objectives and a massive macroeconomic dream time. I found that both in Bangladesh and Afghanistan, as perhaps in most emerging nations, policy making had little inputs into the sphere of innovation and entrepreneurship. National budget allocations for this vital area of activity have been non-existent in some countries.
Microfinance concept and strategy of lending small non-collateralised loans to the poor was an innovation from Nobel Laureat Mohamad Yunus of Bangladesh. Microfinance institutions have sprung up across most countries during the last 20 years with some US$28 billion in current outstanding loans, with a projected real time demand for $250 billion. The small loans have created millions of small businesses often at the level of basic livelihood. The drive toward generating support for innovation and real entrepreneurship among the millions engaged in micro businesses have been significantly absent from the thousands of micro finance institutions.
The need and the challenge mainly for emerging markets is to drive innovation and entrepreneurship as a pivotal point of policy making and support value addition right across their people and economies.
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